What happened

Shares of Gartner (NYSE:IT) are plunging today, down 19.8% as of 1 p.m. EDT, after the research and advisory services company announced solid second-quarter 2019 results but lowered its full-year guidance.

Q2 revenue climbed 7% year over year (or 9% excluding acquired businesses) to $1.071 billion -- roughly in line with expectations -- translating into a 41% increase in adjusted earnings per share to $1.45. Most investors were looking for significantly lower adjusted earnings of $1.18 per share.

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So what

Gartner's growth was broad-based across its business segments, with adjusted sales from research rising 8% to $826 million, conferences revenue increasing 27% to $141 million, and consulting revenue jumping 7% to $104 million. 

CEO Gene Hall called it "another strong quarter," adding that executives "continue to make calculated investments in our business and are well-positioned for sustained long-term, double-digit growth."

To that end, Gartner has opted to make additional investments in its global business sales (GBS) segment -- where contract values climbed a modest 1% year over year at constant currency this quarter -- in order to capitalize on future growth opportunities.

"We've equipped Global Business Sales with the resources, training and tools to achieve success and we're beginning to see a return," Hall stated.

Now what

But those investments will also mean a near-term impact on Gartner's 2019 earnings, which the company now projects will be flat to down 7% to a range of $3.39 to $3.64 (compared to its old per-share outlook for $3.82 to $4.19). 

What's more, Gartner lowered its expectations for research revenue given a weaker-than-expected performance from its non-subscription services, while simultaneously increasing its outlook for the consulting side. The net result of those top-line growth adjustments was a new 2019 revenue guidance range of $4.215 billion to $4.26 billion, down from $4.22 billion to $4.315 billion before.

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